Despite dramatic advances in the manipulation of genes for secreted signaling molecules, the role of secreted morphogens vs. contact-dependent interactions in driving both the patterning and polarity signaling pathways remains unclear. Further, very few good candidate molecules that might mediate putative contact-dependent signaling have been described. These are key issues for understanding pattern formation and they address the mechanistic basis of the observation that "cells in a developmental field respond to changes in position by organizing growth and changes in developmental fate according to positional information which is derived and interpreted via interactions with their neighbors" (Wolpert, 1969). Clones of genes such as dishevelled and shaggy that act intracellularly and downstream of secreted molecules such as wingless can organize ectopic pattern in a position specific manner. In the simplest interpretation, these observations suggest that local cell interactions drive patterning when clones are induced. However, clones which stimulate regulatory growth can also lead to ectopic activation of secreted molecules such as wingless or decapentaplegic. We have further found that signaling by wg suppresses expression of dpp and visa versa. Thus, to address the role of secreted morphogens vs. contact-dependent interactions, it is essential to separate the effects of secreted molecules from those of contact-mediated interactions. Here we propose experiments to do exactly that. The potential of dsh and sgg clones to organize pattern when either the clonal cells or neighboring cells are unable to produce or respond to the putative morphogens dpp and wg will be determined; thus, isolating the effects due to contact-dependent mechanisms from those due to diffusible signals. The potential of such clones to stimulate growth independent of fate specification will also be directly assessed. The fat gene will be tested to determine whether fat is a candidate for mediating in contact- dependent signaling. Continuing studies to elucidate the structural basis of DSH's role in transmitting a relay based polarity signal vs the secreted wg signal will be conducted. The effect of loss of dsh, sgg and fat activity on the subcellular localization of junction associated proteins and on cell affinities will also be examined to test the hypothesis that tissue organization involves differential position specific cell affinity.